$($P$01)$

XYZ Ltd$.$ has an accounts receivable balance of $$200,000$ at the end of $2024.$ The company estimates that $5\%$ of its receivables will be uncollectible. Calculate the bad debt expense for the year and prepare the journal entry to record this expense. Additionally, discuss the impact of recognizing bad debts on the financial statements and the importance of maintaining an adequate allowance for doubtful accounts.